Given that catastrophe bonds are known for having a low correlation to traditional financial markets, global asset management firm Victory Capital has highlighted how the asset class’s portfolio implementation flexibility makes it viable for either an investor’s fixed income allocation or its alternative investment strategy.
In a recent article, Victory Capital outlines that many investors prioritise the incorporation of strategies with returns that either have low or no correlation to other major asset classes, along with securing new sources of income that have the potential to generate attractive risk-adjusted returns regardless of what’s happening across the broader financial market.
This is where the use of catastrophe bonds, a core component of the insurance-linked securities (ILS) market can play a crucial role.
FULL ORIGINAL PUBLICATION HERE